<Page>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q



         (x)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934.

                For the quarterly period ended September 30, 2001

                                       OR

         ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934.

                         Commission File Number 0-24707

                             INET TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

               Delaware                                  75-2269056
       (State or other jurisdiction of                 (I.R.S. employer
        incorporation or organization)                 identification no.)


                          1500 North Greenville Avenue
                             Richardson, Texas 75081
          (Address of principal executive offices, including zip code)


                                 (469) 330-4000
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X   No
                                       ---     ---

Number of shares of common stock outstanding at November 1, 2001: 46,734,009



                                   Page 1 of 25
<Page>

<Table>
<Caption>

                             INET TECHNOLOGIES, INC.
                                      INDEX

                                                                                                    Page No.
                                                                                                    --------
<S>                                                                                                 <C>
Part I - Financial Information (Unaudited)

         Item 1.  Financial Statements

                  Consolidated Balance Sheets ...................................................          3

                  Consolidated Statements of Operations..........................................          4

                  Consolidated Statement of Stockholders' Equity.................................          5

                  Consolidated Statements of Cash Flows..........................................          6

                  Notes to Consolidated Financial Statements ....................................          7

         Item 2.  Management's Discussion and Analysis of Financial Condition and
                  Results of Operations .........................................................         11

         Item 3.  Quantitative and Qualitative Disclosures about Market Risk.....................         25

Part II - Other Information

         Item 2.  Changes in Securities and Use of Proceeds .....................................         25

         Item 6.  Exhibits and Reports on Form 8-K...............................................         25

Signatures        ...............................................................................         25

</Table>



                                   Page 2 of 25

<Page>

PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS


                                      INET TECHNOLOGIES, INC.
                                    CONSOLIDATED BALANCE SHEETS
                                           (Unaudited)

                                              ASSETS

<Table>
<Caption>
                                                                                      SEPTEMBER 30,       DECEMBER 31,
                                                                                          2001                2000
                                                                                      ------------        ------------
                                                                                                 (In thousands,
                                                                                               except share data)
<S>                                                                                   <C>                <C>
Current assets:
  Cash and cash equivalents.........................................................  $   144,950        $   131,419
  Trade accounts receivable, net of allowance for doubtful accounts of $881
    at September 30, 2001 and $1,065 at December 31, 2000...........................       20,822             47,634
  Unbilled receivables..............................................................        2,426              1,925
  Income taxes receivable...........................................................        1,498             12,179
  Inventories.......................................................................       13,368              9,381
  Deferred income taxes.............................................................        1,424              1,667
  Other current assets..............................................................        4,618              3,254
                                                                                      -----------        -----------
          Total current assets......................................................      189,106            207,459
Property and equipment, net.........................................................       20,507             18,408
Other assets........................................................................          175                340
                                                                                      -----------        -----------
          Total assets..............................................................  $   209,788        $   226,207
                                                                                      ===========        ===========

                            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable..................................................................  $     1,671        $     4,629
  Accrued compensation and benefits.................................................        2,134              7,885
  Deferred revenues.................................................................       15,866             22,744
  Other accrued liabilities.........................................................        4,544              5,040
                                                                                      -----------        -----------
          Total current liabilities.................................................       24,215             40,298
Deferred tax liability..............................................................          707                489
Commitments and contingencies
Stockholders' equity:
  Preferred stock, $.001 par value:
     Authorized shares -- 25,000,000
     Issued shares -- None..........................................................           --                 --
  Common stock, $.001 par value:
     Authorized shares -- 175,000,000
     Issued shares -- 46,734,009 at September 30, 2001
       and 46,319,633 at December 31, 2000..........................................           47                 46
  Additional paid-in capital........................................................       71,624             69,935
  Retained earnings.................................................................      113,195            115,439
                                                                                      -----------        -----------
          Total stockholders' equity................................................      184,866            185,420
                                                                                      -----------        -----------
          Total liabilities and stockholders' equity................................  $   209,788        $   226,207
                                                                                      ===========        ===========
</Table>

        See accompanying notes to consolidated financial statements.


                                   Page 3 of 25

<Page>




                                             INET TECHNOLOGIES, INC.
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                                   (Unaudited)

<Table>
<Caption>

                                                           THREE MONTHS ENDED        NINE MONTHS ENDED
                                                              SEPTEMBER 30,            SEPTEMBER 30,
                                                       --------------------------- ----------------------
                                                          2001           2000         2001         2000
                                                       ----------    ------------- ----------    --------
                                                              (In thousands, except per share data)
<S>                                                    <C>           <C>           <C>           <C>

Revenues:
  Product and license fees........................     $   20,145    $   36,410    $   64,686    $   98,893
  Services........................................          5,262         5,015        16,172        12,321
                                                        ---------     ---------     ---------     ---------
       Total revenues.............................         25,407        41,425        80,858       111,214

Cost of revenues:
  Product and license fees........................          8,918         8,017        27,975        21,537
  Services........................................          2,024         2,429         6,701         6,300
                                                        ---------     ---------     ---------     ---------
       Total cost of revenues.....................         10,942        10,446        34,676        27,837
                                                        ---------     ---------     ---------     ---------

           Gross profit...........................         14,465        30,979        46,182        83,377
Operating expenses:
  Research and development........................          8,984         9,194        30,608        24,115
  Sales and marketing.............................          3,968         5,420        14,844        13,634
  General and administrative......................          2,117         3,356         7,387         8,847
  Restructuring...................................             --            --         2,252            --
                                                         --------      --------      --------      --------
       Total operating expenses...................         15,069        17,970        55,091        46,596
                                                        ---------     ---------     ---------     ---------
       Income (loss) from operations..............           (604)       13,009        (8,909)       36,781
Other income (expense):
  Interest income.................................          1,198         2,157         4,735         6,043
  Other expense...................................            (17)          (33)         (113)          (55)
                                                        ---------     ---------     ---------     ---------
       Total other income (expense)...............          1,181         2,124         4,622         5,988
                                                        ---------     ---------     ---------     ---------
       Income (loss) before provision for
          income taxes............................            577        15,133        (4,287)       42,769
Provision (benefit) for income taxes..............           (292)        4,994        (2,043)       14,390
                                                       -----------   ----------    -----------   ----------
       Net income (loss)..........................     $      869    $   10,139    $   (2,244)   $   28,379
                                                       ==========    ==========    ===========   ==========

Earnings (loss) per common share:
       Basic......................................     $     0.02    $     0.22    $    (0.05)   $     0.62
                                                       ==========    ==========    ===========   ==========
       Diluted....................................     $     0.02    $     0.22    $    (0.05)   $     0.61
                                                       ==========    ==========    ===========   ==========

Weighted-average shares outstanding:
       Basic......................................         46,700        46,205        46,595        46,063
                                                       ==========    ==========    ==========    ==========
       Diluted....................................         46,825        46,864        46,595        46,840
                                                       ==========    ==========    ==========    ==========

</Table>

         See accompanying notes to consolidated financial statements.






                                 Page 4 of 25

<Page>




                                             INET TECHNOLOGIES, INC.
                                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                   (Unaudited)

<Table>
<Caption>


                                                        COMMON STOCK          ADDITIONAL                       TOTAL
                                                --------------------------      PAID-IN     RETAINED       STOCKHOLDERS'
                                                    SHARES       AMOUNT         CAPITAL     EARNINGS          EQUITY
                                                -------------  ----------   -------------- -----------     -----------
                                                                  (In thousands, except share data)
<S>                                             <C>            <C>          <C>            <C>             <C>

Balance at December 31, 2000..............         46,319,633      $ 46       $  69,935      $ 115,439     $  185,420
  Issuance of common stock under stock
    option and stock purchase plans.......            414,376         1           1,689             --          1,690
  Net loss................................                 --        --              --         (2,244)        (2,244)
                                                -------------      ----       ---------      ---------     ----------
Balance at September 30, 2001.............         46,734,009      $ 47       $  71,624      $ 113,195     $  184,866
                                                 ============      ====       =========      =========     ==========

</Table>

         See accompanying notes to consolidated financial statements.










                                 Page 5 of 25

<Page>

                             INET TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<Table>
<Caption>

                                                             NINE MONTHS ENDED
                                                                SEPTEMBER 30,
                                                           ----------------------
                                                              2001        2000
                                                           ----------  ----------
                                                              (In thousands)
<S>                                                        <C>         <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................................   $  (2,244)  $   28,379
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
  Depreciation..........................................       5,361        3,615
  Deferred income taxes.................................         461          267
  Issuance of common stock and stock options
   charged to expense...................................          --          173
  Changes in operating assets and liabilities:
     (Increase) decrease in trade accounts receivable...      26,812       (5,108)
     Increase in unbilled receivables...................        (501)      (1,098)
     (Increase) decrease in income taxes receivable.....       9,410         (847)
     Increase in inventories............................      (3,987)      (3,656)
     Increase in other assets...........................      (1,199)      (2,254)
     Increase (decrease) in accounts payable............      (2,958)       1,880
     Decrease in taxes payable..........................          --         (213)
     Increase (decrease) in accrued compensation
      and benefits......................................      (5,751)       1,889
     Decrease in deferred revenues......................      (6,878)      (4,109)
     Increase (decrease) in other accrued liabilities...        (496)       2,029
                                                           ----------  ----------
Net cash provided by operating activities...............      18,030       20,947
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.....................      (7,460)      (9,740)
                                                           ---------   -----------
Net cash used in investing activities...................      (7,460)      (9,740)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock upon
   exercise of stock options and purchases under
   employee stock purchase plan.........................       2,961        3,332
                                                           ---------   ----------
Net cash provided by financing activities...............       2,961        3,332
                                                           ---------   ----------

Net increase in cash and cash equivalents...............      13,531       14,539
Cash and cash equivalents at beginning of period........     131,419      127,903
                                                           ---------   ----------
Cash and cash equivalents at end of period..............   $ 144,950   $  142,442
                                                           =========   ==========

SUPPLEMENTAL DISCLOSURES:
   Income taxes paid....................................   $     504   $   15,172
                                                           =========   ==========

</Table>

         See accompanying notes to consolidated financial statements.





                                 Page 6 of 25
<Page>

                             INET TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         THE COMPANY

         We are a global provider of communications software solutions that
         enable carriers to more effectively design, deploy, diagnose, monitor
         and manage communications networks that carry signaling information
         used to control and deliver communications sessions and services. These
         communications sessions include phone calls, dial-up Internet access
         and other service transactions or sessions. Our solutions also address
         the fundamental business needs of communications carriers, such as
         improved billing, targeted sales and marketing, fraud prevention and
         enhanced routing. We provide these comprehensive offerings through our
         network intelligence, business intelligence and diagnostics solutions.

         CONSOLIDATION

         The consolidated financial statements include the accounts of our
         wholly-owned subsidiaries. Intercompany balances and transactions have
         been eliminated.

         UNAUDITED INTERIM FINANCIAL STATEMENTS

         We have prepared the accompanying unaudited consolidated financial
         statements in accordance with accounting principles generally accepted
         in the United States for interim financial information and the
         instructions to Form 10-Q and Article 10 of Regulation S-X.
         Accordingly, they do not include all of the information and footnotes
         required by accounting principles generally accepted in the United
         States for complete financial statements. In our opinion, all
         adjustments, consisting solely of normal recurring adjustments,
         necessary for a fair statement of the results for the interim periods
         presented have been included. These financial statements should be read
         in conjunction with the audited financial statements and related notes
         for the three years ended December 31, 2000, included in our Annual
         Report on Form 10-K filed with the Securities and Exchange Commission,
         or SEC, on March 26, 2001. Financial results for the three- and
         nine-month periods ended September 30, 2001 are not necessarily
         indicative of the results that may be expected for any other interim
         period or for the year ending December 31, 2001.

         CASH AND CASH EQUIVALENTS

         All highly liquid securities with original maturities of three months
         or less are classified as cash equivalents. The carrying value of cash
         equivalents approximates fair market value.

         INVENTORIES

         Inventories are valued at the lower of standard cost, which
         approximates actual cost determined on a first-in, first-out basis, or
         market. At September 30, 2001 and December 31, 2000, inventories
         consisted of the following (in thousands):

                                                SEPTEMBER 30,   DECEMBER 31,
                                                    2001            2000
                                                ------------    ------------

                     Raw materials..........     $     8,038     $    4,183
                     Work-in-process........           1,005            241
                     Finished goods.........           4,325          4,957
                                                 -----------     ----------
                                                 $    13,368     $    9,381
                                                 ===========     ==========



                                      Page 7 of 25
<Page>


         REVENUE RECOGNITION

         Effective January 1, 2000, we adopted Statement of Position, or SOP,
         98-9, MODIFICATION OF SOP 97-2, `SOFTWARE REVENUE RECOGNITION' WITH
         RESPECT TO CERTAIN TRANSACTIONS, which did not require a significant
         change to our revenue recognition policies. In December 1999, the SEC
         issued Staff Accounting Bulletin, or SAB, No. 101, REVENUE RECOGNITION
         IN FINANCIAL STATEMENTS, which we adopted in the fourth quarter of 2000
         retroactive to January 1, 2000. The adoption of SAB 101 did not
         materially affect our revenue recognition policies.

         We derive revenues primarily from the sale of products and software
         license fees as well as services, which include training, warranty and
         product support services.

         Except as otherwise discussed below, revenues from product and license
         fees are recognized in the period we have completed all hardware
         manufacturing and/or software development to contractual
         specifications, factory testing has been completed, the product has
         been shipped to the customer, the fee is fixed and determinable and
         collection is considered probable. When we have significant obligations
         subsequent to shipment, for example, installation and system
         integration, revenues are recognized when there are no significant
         unfulfilled obligations. Revenues from arrangements that include
         significant acceptance terms are recognized when acceptance has
         occurred.

         Revenues for fixed-priced contracts that require significant software
         development and are generally in duration in excess of nine months are
         recognized using the percentage-of-completion method. Revenues from
         these contracts are recognized upon attainment of scheduled performance
         milestones. Anticipated losses on fixed-priced contracts are recognized
         when estimable.

         We offer our customers product support services, which include the
         correction of software problems, telephone access to our technical
         personnel and the right to receive unspecified product updates,
         upgrades and enhancements, when and if they become available. Revenues
         from these services, including product support services included in
         initial licensing fees, are recognized ratably over the contract
         period. Product support services included in the initial licensing fee
         are allocated from the total contract amount based on the relative fair
         value of these services determined using vendor-specific objective
         evidence, or VSOE. Revenues from other services, such as training, are
         recognized when the services have been completed.

         Deferred revenues represent amounts billed to customers, but not yet
         recognized as revenue. Unbilled receivables represent amounts
         recognized as revenue, but not yet billed to customers.

         ACCOUNTING ESTIMATES

         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States requires us to make
         estimates and assumptions that affect the amounts reported in the
         financial statements and accompanying notes. Actual results could
         differ from these estimates.

  NOTE 2 - RELATED PARTY TRANSACTION

         Effective January 1, 2000, we sold our membership interest in Inet
         Global Research, L.L.C., to an entity controlled by a related party for
         a cash purchase price of $82,000. No gain or loss was recorded for the
         sale. This entity is currently performing services for us for which it
         is paid a monthly fee per dedicated full-time programmer plus
         reimbursement of reasonable business expenses. We paid approximately
         $1.3 million for these services for the nine months ended September 30,
         2001, and approximately $0.4 million for the nine months ended
         September 30, 2000.



                                      Page 8 of 25
<Page>


  NOTE 3 - RESTRUCTURING

         In March 2001, we recorded a restructuring charge of approximately $0.5
         million primarily related to a workforce reduction of approximately 40
         employees. The reduction affected all areas of the company. The charge
         primarily consisted of employee severance costs, professional fees and
         outplacement services. At September 30, 2001, the balance of these
         costs that remained to be paid totaled approximately $0.1 million.

         In May 2001, we announced our decision to refocus our strategy and
         streamline operations to reduce our cost structure in response to the
         generally weakened economic environment and changing demand
         characteristics in some of our markets. As part of this decision, we
         discontinued all efforts with respect to our softswitch offering,
         VIA-TM-, and reduced our workforce by approximately 115 employees.
         The reduction affected all areas of the company. We recorded a
         restructuring charge of approximately $1.7 million, which consisted of
         employee severance costs of approximately $1.1 million, professional
         fees and outplacement services of approximately $0.3 million and the
         write-off of assets related to the VIA softswitch product of
         approximately $0.3 million. At September 30, 2001, the balance of these
         costs that remained to be paid totaled approximately $0.4 million.

  NOTE 4 - EARNINGS (LOSS) PER SHARE

         The following table sets forth the computation of basic and diluted
         earnings (loss) per share (in thousands, except per share amounts):

<Table>
<Caption>
                                                                        THREE MONTHS ENDED          NINE MONTHS ENDED
                                                                            SEPTEMBER 30,              SEPTEMBER 30,
                                                                      -----------------------    -----------------------
                                                                         2001         2000          2001          2000
                                                                      ---------     ---------    ----------    ---------
                   <S>                                                <C>           <C>          <C>           <C>
                   Numerator:
                     Net income (loss) for basic and diluted
                       earnings (loss) per share..............        $     869     $  10,139    $  (2,244)    $  28,379
                                                                      =========     =========    ==========    =========
                   Denominator:
                     Denominator for basic earnings (loss) per
                       share-- weighted-average shares........           46,700        46,205       46,595        46,063
                     Dilutive securities:  Employee stock
                       options and purchase rights............              125           659           --           777
                                                                      ---------     ---------    ----------    ---------
                     Denominator for diluted earnings
                       (loss) per share-- adjusted
                       weighted-average shares................           46,825        46,864       46,595        46,840
                                                                      =========     =========    ==========    =========

                   Basic earnings (loss) per common share.....        $    0.02     $    0.22    $   (0.05)    $    0.62
                                                                      =========     =========    ==========    =========

                   Diluted earnings (loss) per common share...        $    0.02     $    0.22    $   (0.05)    $    0.61
                                                                      =========     =========    ==========    =========
</Table>

  NOTE 5 -  COMPREHENSIVE INCOME

         For all periods presented, we had no material components of
         comprehensive income other than net income (loss).




                                                   Page 9 of 25
<Page>




   NOTE 6 - SEGMENT INFORMATION

         We operate in a single industry segment, providing communications
         software solutions and associated services to our customers through our
         sales personnel and foreign distributors. As a result, the financial
         information disclosed in this report represents all material financial
         information related to our sole operating segment. The geographic
         distribution of our revenues as a percentage of total revenues is as
         follows:

<Table>
<Caption>
                                              THREE MONTHS ENDED       NINE MONTHS ENDED
                                                 SEPTEMBER 30,           SEPTEMBER 30,
                                              ------------------      ------------------
                                                2001      2000          2001       2000
                                              --------   -------      --------   -------
             <S>                              <C>        <C>          <C>        <C>

             United States...............        49.5%     48.3%         41.6%     48.0%
             Export:
               Asia/Pacific..............         3.7       3.7           5.9       5.4
               Europe, Middle East and           45.2      40.4          49.1      41.4
                Africa...................
               Other.....................         1.6       7.6           3.4       5.2
                                              --------   -------      --------   -------
                 Total export revenue            50.5      51.7          58.4      52.0
                                              --------   -------      --------   -------
                                                100.0%    100.0%        100.0%    100.0%
                                              ========   =======      ========   =======
</Table>

         For the three months ended September 30, 2001, revenues from each of
         three customers accounted for more than 10% of total revenues. For the
         three months ended September 30, 2000, revenues from one customer
         accounted for more than 10% of total revenues. For the nine months
         ended September 30, 2001, revenues from one customer accounted for more
         than 10% of total revenues. For the nine months ended September 30,
         2000, revenues from each of two customers accounted for more than 10%
         of total revenues.

         We have no significant long-lived assets deployed outside of the United
         States.

  NOTE 7 - PROVISION FOR INCOME TAXES

         Federal income taxes for the interim periods presented have been
         included in the accompanying financial statements on the basis of an
         estimated annual rate. The primary reason the effective annualized tax
         rate for 2001 differs from the 35 percent statutory corporate tax rate
         is due to decreased income levels combined with tax benefits such as
         the research and development tax credit.

  NOTE 8 - DERIVATIVES

         On January 1, 2001, we adopted Statement of Financial Accounting
         Standards, or SFAS, No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
         HEDGING ACTIVITIES, as amended. SFAS 133 requires that all derivatives
         be recognized at fair value on the balance sheet, and that the
         corresponding gains or losses be included in comprehensive income,
         depending on the type of hedging relationship that exists. Adoption of
         this standard did not have a material effect on our financial
         statements.

  NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board, FASB, issued
         SFAS No. 141, BUSINESS COMBINATIONS, and SFAS No. 142, GOODWILL AND
         OTHER INTANGIBLE ASSETS. SFAS No. 141 requires that all business
         combinations initiated after June 30, 2001, be accounted for using the
         purchase method of accounting and prohibits the use of the
         pooling-of-interest method. SFAS No. 142 changes the accounting for
         goodwill from an amortization method to an impairment-only approach. We
         do not anticipate that adoption of these standards will have a material
         effect on our financial statements.

         In August 2001, the FASB issued SFAS No. 143, ACCOUNTING FOR ASSET
         RETIREMENT OBLIGATIONS, which requires entities to record the fair
         value of a liability for an asset retirement obligation in the period
         in


                                   Page 10 of 25
<Page>


         which it is incurred. We do not anticipate that adoption of this
         standard will have a material effect on our financial statements.

         In October 2001, the FASB issued SFAS No. 144, ACCOUNTING FOR THE
         IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE
         DISPOSED OF, which changes the criteria for assets-held-for-sale and
         changes the reporting requirements for the disposal of a business
         segment. We do not anticipate that adoption of this standard will have
         a material effect on our financial statements.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         FORWARD-LOOKING STATEMENTS

         THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS
         WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS
         AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS
         AMENDED. ALL STATEMENTS OTHER THAN HISTORICAL OR CURRENT FACTS,
         INCLUDING, WITHOUT LIMITATION, STATEMENTS ABOUT OUR BUSINESS STRATEGY,
         PLANS AND OBJECTIVES OF MANAGEMENT AND OUR FUTURE PROSPECTS, ARE
         FORWARD-LOOKING STATEMENTS. ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS
         REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, SUCH
         FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT
         COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE
         EXPECTATIONS. SUCH RISKS AND UNCERTAINTIES INCLUDE, WITHOUT LIMITATION,
         THE FOLLOWING:

         o    OUR FINANCIAL RESULTS ARE DIFFICULT TO PREDICT AND ARE LIKELY TO
              VARY SIGNIFICANTLY FROM QUARTER TO QUARTER IN THE FUTURE;

         o    WE COULD BE MATERIALLY HARMED IN THE EVENT OF A CONTINUED GENERAL
              ECONOMIC SLOWDOWN;

         o    WE COULD BE MATERIALLY HARMED IN THE EVENT OF A REVERSAL OR
              SLOWDOWN IN THE PACE OF THE PRIVATIZATION, RESTRUCTURING OR
              DEREGULATION OF THE TELECOMMUNICATIONS INDUSTRY, A CONTINUED
              SIGNIFICANT SLOWDOWN IN THE GROWTH OF THAT INDUSTRY OR
              CONSOLIDATIONS INVOLVING OUR CURRENT OR PROSPECTIVE CUSTOMERS;

         o    ANY REDUCTION IN DEMAND FOR OUR NETWORK INTELLIGENCE, BUSINESS
              INTELLIGENCE AND DIAGNOSTICS SOLUTIONS COULD MATERIALLY HARM OUR
              BUSINESS;

         o    WE COULD BE MATERIALLY HARMED IF THE MARKET FOR CONVERGING AND
              NEXT-GENERATION NETWORK SOLUTIONS FAILS TO GROW AS WE CURRENTLY
              ANTICIPATE;

         o    INCREASED COMPETITION IS LIKELY TO RESULT IN FURTHER PRICE
              REDUCTIONS, REDUCED MARGINS AND LOSS OF MARKET SHARE; AND

         o    OTHER RISKS INDICATED BELOW UNDER THE CAPTION "RISK FACTORS".

         THESE RISKS AND UNCERTAINTIES ARE BEYOND OUR CONTROL AND, IN MANY
         CASES, WE CANNOT PREDICT THE RISKS AND UNCERTAINTIES THAT COULD CAUSE
         OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY THE
         FORWARD-LOOKING STATEMENTS. WHEN USED IN THIS DOCUMENT, THE WORDS
         "BELIEVES," "PLANS," "EXPECTS," "ANTICIPATES," "INTENDS," "CONTINUE,"
         "MAY," "WILL," "COULD," "SHOULD," "FUTURE," "POTENTIAL," "ESTIMATE" OR
         THE NEGATIVE OF SUCH TERMS AND SIMILAR EXPRESSIONS AS THEY RELATE TO US
         OR OUR MANAGEMENT ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.

         THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH, AND IS
         QUALIFIED IN ITS ENTIRETY BY, THE CONSOLIDATED FINANCIAL STATEMENTS AND
         RELATED NOTES INCLUDED IN ITEM 1 OF THIS QUARTERLY REPORT AND THE
         CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES AND MANAGEMENT'S
         DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
         OPERATIONS IN OUR ANNUAL REPORT ON FORM 10-K FILED WITH THE SEC ON
         MARCH 26, 2001. HISTORICAL RESULTS AND PERCENTAGE RELATIONSHIPS AMONG
         ANY AMOUNTS IN THE FINANCIAL STATEMENTS ARE NOT NECESSARILY INDICATIVE
         OF TRENDS IN FINANCIAL RESULTS FOR ANY FUTURE PERIODS.



                                 Page 11 of 25
<Page>

         OVERVIEW

         We were founded in 1989 and during the early years of our operations
         we focused primarily on developing and selling diagnostics tools for
         a predecessor to the Signaling System #7, or SS7, signaling protocol.
         As the telecommunications industry increasingly adopted SS7, we
         shifted our focus to developing and deploying SS7-based solutions as
         well as broadening our product offerings. Our diagnostics solution,
         Spectra-TM-, was first introduced in December 1990 and is currently
         in its tenth generation release. Beginning in 1993, we focused a
         significant portion of our product development efforts on developing
         a complete monitoring and surveillance solution for SS7 networks,
         culminating in the introduction of our network intelligence solution,
         the GeoProbe-TM-, in late 1995. Beginning in late 1999 and into 2001,
         we introduced a suite of business intelligence solutions called
         IT:seven-TM-. These applications enable carriers to protect and
         generate additional revenues within their networks and at
         interconnection boundaries. In June 2001, we introduced our
         next-generation diagnostics solution, Spectra2 MG-TM-. We continue to
         focus significant resources on the development of enhancements, new
         features and new applications for our existing product areas.

         Historically, we have generated substantially all of our revenues from
         sales of our network intelligence and diagnostics solutions.
         Specifically, revenues attributable to the GeoProbe have represented a
         majority of our total revenues since 1998. We expect revenues from our
         network intelligence and business intelligence offerings to continue to
         represent a majority of our revenues given the relatively higher growth
         rates expected for these solutions. Our remaining revenues are derived
         from services relating to these and other products. These services
         include training, warranty and product support.

         RESULTS OF OPERATIONS

         The following table sets forth, for the periods presented, certain data
         derived from our unaudited consolidated statements of operations
         expressed as a percentage of total revenues. The financial results for
         the three- and nine-month periods ended September 30, 2001 are not
         necessarily indicative of the results that may be expected for any
         other interim period or for the year ending December 31, 2001.

<Table>
<Caption>
                                                                            THREE MONTHS ENDED         NINE MONTHS ENDED
                                                                               SEPTEMBER 30,             SEPTEMBER 30,
                                                                         ----------------------    ----------------------
                                                                           2001          2000        2001          2000
                                                                         ---------    ---------    ---------     --------
                <S>                                                      <C>          <C>          <C>           <C>
                Revenues:
                  Product and license fees.........................          79.3%        87.9%        80.0%        88.9%
                  Services.........................................          20.7         12.1         20.0         11.1
                                                                           ------       ------       ------       ------
                    Total revenues.................................         100.0        100.0        100.0        100.0
                Cost of revenues:
                  Product and license fees.........................          35.1         19.3         34.6         19.4
                  Services.........................................           8.0          5.9          8.3          5.6
                                                                           ------       ------       ------       ------
                    Total cost of revenues.........................          43.1         25.2         42.9         25.0
                                                                           ------       ------       ------       ------
                  Gross profit.....................................          56.9         74.8         57.1         75.0
                Operating expenses:
                  Research and development.........................          35.4         22.2         37.8         21.7
                  Sales and marketing..............................          15.6         13.1         18.4         12.3
                  General and administrative.......................           8.3          8.1          9.1          7.9
                  Restructuring....................................            --           --          2.8           --
                                                                           ------       ------       ------       ------
                    Total operating expenses.......................          59.3         43.4         68.1         41.9
                                                                          -------      -------      -------      -------
                Income (loss) from operations......................          (2.4)        31.4        (11.0)        33.1
                Other income.......................................           4.7          5.1          5.7          5.4
                                                                          -------      -------      -------      -------
                Income (loss) before provision for income taxes....           2.3         36.5         (5.3)        38.5
                Provision (benefit) for income taxes...............          (1.1)        12.0         (2.5)        13.0
                                                                          --------     -------      --------     -------
                Net income (loss)..................................           3.4%        24.5%        (2.8)%       25.5%
                                                                          =======      =======      ========     =======
</Table>

                                                   Page 12 of 25
<Page>

         REVENUES

         PRODUCT AND LICENSE FEES. Revenues from product and license fees
         decreased 44.7% to $20.1 million for the three months ended September
         30, 2001 from $36.4 million for the three months ended September 30,
         2000. For the nine months ended September 30, 2001, revenues from
         product and license fees decreased 34.6% to $64.7 million from $98.9
         million for the nine months ended September 30, 2000. The decline in
         revenues from product and license fees is primarily attributable to
         lower sales volume reflecting a decrease in demand for our solutions,
         which is primarily driven by the slowdown in the economy, and also to a
         lesser extent relatively lower sales prices for certain basic
         applications of our network intelligence solutions.

         SERVICES. Revenues from services consisted primarily of recurring fees
         associated with product support services and increased 4.9% to $5.3
         million for the three months ended September 30, 2001 from $5.0 million
         for the three months ended September 30, 2000. For the nine months
         ended September 30, 2001, revenues from services increased 31.3% to
         $16.2 million from $12.3 million for the nine months ended September
         30, 2000. The increase in services revenues is due to an increase in
         the number of customers and a larger installed base of products.

         CONCENTRATION OF REVENUES. For the three months ended September 30,
         2001, three customers each accounted for more than 10% of total
         revenues. For the three months ended September 30, 2000, revenues from
         one customer accounted for more than 10% of total revenues. For the
         nine months ended September 30, 2001, revenues from one customer
         accounted for more than 10% of total revenues. For the nine months
         ended September 30, 2000, revenues from two customers each accounted
         for more than 10% of total revenues.

         INTERNATIONAL REVENUES. For the three months ended September 30, 2001,
         international revenues accounted for 50.5% of total revenues compared
         to 51.7% of total revenues for the three months ended September 30,
         2000. For the nine months ended September 30, 2001, international
         revenues accounted for 58.4% of total revenues compared to 52.0% of
         total revenues for the nine months ended September 30, 2000. Variations
         in the percentage of total revenues derived from international markets
         may occur given that a large percentage of our revenues are typically
         derived from a small number of customers, the specific make up of which
         varies from one quarter to the next.

         COST OF REVENUES

         PRODUCT AND LICENSE FEES. Cost of product and license fees consists
         primarily of hardware expenses and personnel and overhead costs related
         to the manufacturing, integration and installation of our products.
         Cost of product and license fees was $8.9 million, or 35.1% of total
         revenues, for the three months ended September 30, 2001, compared to
         $8.0 million, or 19.3% of total revenues, for the three months ended
         September 30, 2000. The increase in absolute dollars is primarily
         related to increased costs for third-party contract labor and increased
         reserves for excess and obsolete inventory. The increase as a
         percentage of total revenues was primarily attributable to increased
         costs for third party contract labor and increased reserves for excess
         and obsolete inventory as well as the decreased level of revenues.

         For the nine months ended September 30, 2001, cost of product and
         license fees was $28.0 million, or 34.6% of total revenues, compared to
         $21.5 million, or 19.4% of total revenues, for the nine months ended
         September 30, 2000. The increase in absolute dollars resulted primarily
         from increased hardware costs, increased costs for third-party contract
         labor, increased reserves for excess and obsolete inventory, increased
         personnel costs due to higher average headcount and costs associated
         with the decision to cancel purchase commitments for certain product
         components. The increase in hardware costs reflects lower margins
         primarily for our GeoProbe solutions and increased costs associated
         with supporting new versions of our GeoProbe solutions. The increase as
         a percentage of total revenues was attributable to these factors
         combined with the decreased level of revenues.

         SERVICES. Cost of services consists of expenses, primarily personnel
         costs, related to product support, training, and warranty and
         non-warranty work. Cost of services was $2.0 million, or 8.0% of total

                               Page 13 of 25
<Page>

         revenues, for the three months ended September 30, 2001 and $2.4
         million, or 5.9% of total revenues, for the three months ended
         September 30, 2000. Cost of services was $6.7 million, or 8.3% of total
         revenues, for the nine months ended September 30, 2001 and $6.3
         million, or 5.6% of total revenues, for the nine months ended September
         30, 2000. Cost of services as a percentage of total revenues has
         historically fluctuated as a result of the relative mix of product
         support, training and warranty and non-warranty work for a specific
         period.

         OPERATING EXPENSES

         RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
         consist primarily of personnel, contract labor, travel and facilities
         costs. These expenses decreased to $9.0 million for the three months
         ended September 30, 2001 from $9.2 million for the three months ended
         September 30, 2000. Research and development expenses as a percentage
         of total revenues were 35.4% for the three months ended September 30,
         2001 and 22.2% for the three months ended September 30, 2000. The
         increase as a percentage of total revenues was attributable primarily
         to the decreased level of revenues.

         For the nine months ended September 30, 2001, research and development
         expenses increased to $30.6 million from $24.1 million for the
         comparable prior-year period. The increase in absolute dollars was
         primarily due to increased average headcount, higher average wage
         levels required to retain qualified technical and engineering personnel
         and greater use of third-party research and development. Research and
         development expenses as a percentage of total revenues were 37.8% for
         the nine months ended September 30, 2001, and 21.7% for the nine months
         ended September 30, 2000. The increase as a percentage of total
         revenues was attributable to these factors combined with the decreased
         level of revenues.

         Software development costs are expensed as incurred until technological
         feasibility has been established, at which time subsequent costs are
         permitted to be capitalized until the product is available for general
         release to customers. To date, either the establishment of
         technological feasibility of our products has substantially coincided
         with their general release, or costs incurred subsequent to the
         achievement of technological feasibility have not been material. As a
         result, software development costs qualifying for capitalization have
         been insignificant, and we have not capitalized any software
         development costs.

         SALES AND MARKETING EXPENSES. Sales and marketing expenses consist
         primarily of personnel, travel, facilities and marketing expenses such
         as trade shows and advertising expenses. These expenses decreased to
         $4.0 million for the three months ended September 30, 2001 from $5.4
         million for the three months ended September 30, 2000. The decrease in
         absolute dollars was primarily attributable to a decrease in sales
         commissions due to lower order levels and cost reduction efforts
         primarily related to travel. Sales and marketing expenses as a
         percentage of total revenues were 15.6% for the three months ended
         September 30, 2001 and 13.1% for the three months ended September 30,
         2000. The increase as a percentage of total revenues was attributable
         primarily to the decreased level of revenues.

         Sales and marketing expenses increased to $14.8 million for the nine
         months ended September 30, 2001 from $13.6 million for the nine months
         ended September 30, 2000. The increase was primarily due to increased
         personnel costs related to increased average headcount. Sales and
         marketing expenses as a percentage of total revenues were 18.4% for the
         nine months ended September 30, 2001, and 12.3% for the nine months
         ended September 30, 2000. The increase as a percentage of total
         revenues was attributable to the combination of the increase in
         personnel costs from increased average headcount and the decreased
         level of revenues.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
         expenses consist primarily of personnel, facilities and other costs of
         our finance, administrative and executive departments, as well as
         professional fees and expenses associated with legal and accounting
         requirements. These expenses decreased to $2.1 million for the three
         months ended September 30, 2001 from $3.4 million for the three months
         ended September 30, 2000. The decrease in absolute dollars was
         primarily related to decreased incentive compensation and decreased
         professional fees. General and administrative expenses as a percentage
         of total revenues were 8.3% for the three months ended September 30,
         2001 and 8.1% for the


                               Page 14 of 25

<Page>

         three months ended September 30, 2000. The slight increase as a
         percentage of total revenues was attributable to the decreased level of
         revenues.

         General and administrative expenses decreased to $7.4 million for the
         nine months ended September 30, 2001 from $8.8 million for the nine
         months ended September 30, 2000. The decrease in absolute dollars was
         primarily related to decreased incentive compensation and decreased
         professional fees. General and administrative expenses as a percentage
         of total revenues were 9.1% for the nine months ended September 30,
         2001 and 7.9% for the nine months ended September 30, 2000. The
         increase as a percentage of total revenues was attributable to the
         decreased level of revenues.

         RESTRUCTURING COSTS. We recorded a restructuring charge for the three
         months ended March 31, 2001 of approximately $0.5 million primarily
         related to a workforce reduction of approximately 40 employees. The
         reduction affected all areas of the company. The charge primarily
         consisted of employee severance costs, professional fees and
         outplacement services. At September 30, 2001, the balance of these
         costs that remained to be paid totaled approximately $0.1 million.

         In May 2001, we announced our decision to refocus our strategy and
         streamline operations to reduce our cost structure in response to the
         generally weakened economic environment and changing demand
         characteristics in some of our markets. As part of this decision, we
         discontinued all efforts with respect to our VIA softswitch offering
         and reduced our workforce by approximately 115 employees. The reduction
         affected all areas of the company. We recorded a restructuring charge
         for the three months ended September 30, 2001 of approximately $1.7
         million, which consisted of employee severance costs of approximately
         $1.1 million, professional fees and outplacement services of
         approximately $0.3 million and the write-off of assets related to the
         VIA softswitch of approximately $0.3 million. At September 30, 2001,
         the balance of these costs that remained to be paid totaled
         approximately $0.4 million.

         OTHER INCOME

         Other income is primarily interest income earned on our cash and cash
         equivalents. Other income was $1.2 million for the three months ended
         September 30, 2001 compared to $2.1 million for the three months ended
         September 30, 2000. Other income was $4.7 million for the nine months
         ended September 30, 2001 compared to $6.0 million for the nine months
         ended September 30, 2000. The decrease for both the three- and
         nine-month periods ended September 30, 2001 is primarily attributable
         to the overall decrease in interest rates paid on our investments.

         PROVISION FOR INCOME TAXES

         We recorded an income tax benefit of $0.3 million for the three months
         ended September 30, 2001 compared to income tax expense of $5.0 million
         for the three months ended September 30, 2000. Our effective tax rates
         for these periods were (50.6%) and 33.0%, respectively. We recorded an
         income tax benefit of $2.0 million for the nine months ended September
         30, 2001 compared to income tax expense of $14.4 million for the nine
         months ended September 30, 2000. Our effective tax rates for these
         periods were 47.7% and 33.6%, respectively. Federal income taxes for
         the interim periods presented have been calculated on the basis of an
         estimated annual rate. Our effective tax rates for 2001 differ from the
         35% U.S. statutory rate primarily due to decreased income levels
         combined with the availability of the research and development tax
         credit.

         LIQUIDITY AND CAPITAL RESOURCES

         Since our inception, we have funded our operations and met our capital
         expenditure requirements primarily through cash flows from operations.
         We had working capital of $164.9 million at September 30, 2001 and
         $167.2 million at December 31, 2000. At September 30, 2001, we had
         $145.0 million in cash and cash equivalents, an increase of $13.6
         million from $131.4 million in cash and cash equivalents at December
         31, 2000. The increase in cash and cash equivalents is primarily
         attributable to a decrease in trade accounts receivable due to
         collections on these accounts, receipt of an income tax refund and

                               Page 15 of 25
<Page>

         proceeds from the issuance of common stock as a result of the exercise
         of stock options and purchases under our employee stock purchase plan.

         Net cash provided by operating activities was $18.0 million for the
         nine months ended September 30, 2001, compared to $20.9 million during
         the same period in 2000. Net cash provided by operating activities
         resulted primarily from a decrease in trade accounts receivable due to
         collections of these accounts and a decrease in income taxes
         receivable.

         Net cash used in investing activities was $7.5 million for the nine
         months ended September 30, 2001 compared to $9.7 million during the
         same period in 2000. Net cash used in investing activities for both
         periods related to purchases of property and equipment.

         Net cash provided by financing activities was $3.0 million for the nine
         months ended September 30, 2001 and $3.3 million during the same period
         of 2000. Net cash provided by financing activities in both periods
         resulted from proceeds from the issuance of common stock as a result of
         the exercise of stock options and purchases under our employee stock
         purchase plan.

         Our revolving credit facility expired on August 15, 2001, and was not
         renewed or replaced.

         At September 30, 2001, we had no material commitments for capital
         expenditures.

         Any material acquisition or joint venture could result in a decrease to
         our working capital, depending on the amount, timing and nature of the
         consideration to be paid. Absent any such acquisition or joint venture,
         we anticipate that current cash balances combined with potential cash
         flows from operations will be sufficient to meet our anticipated cash
         needs for working capital, capital expenditures and other activities
         for at least the next 12 months. Thereafter, if current sources are not
         sufficient to meet our needs, we may seek additional equity or debt
         financing. In addition, any material acquisition of complementary
         businesses, products or technologies or material joint venture could
         require us to obtain additional equity or debt financing. There can be
         no assurance that additional financing would be available on acceptable
         terms, if at all.

         RISK FACTORS

         You should carefully consider the risks described below before making
         an investment decision. The risks and uncertainties described below are
         not the only ones facing our company. Additional risks and
         uncertainties that we do not presently know or that we currently deem
         immaterial may also impair our business operations. This report is
         qualified in its entirety by these risk factors.

         If any of the following risks actually occur, they could materially
         adversely affect our business, financial condition or results of
         operations. In that case, the trading price of our common stock could
         decline.

         OUR QUARTERLY FINANCIAL RESULTS FLUCTUATE AND ARE DIFFICULT TO PREDICT.

         Since our future financial results are likely to vary significantly
         from quarter to quarter, you should not rely on our results of
         operations during any particular quarter as an indication of our future
         performance in any fiscal year or quarterly period. Our quarterly
         financial results have varied significantly in the past and are likely
         to vary significantly from quarter to quarter in the future based on a
         number of factors, many of which are outside of our control. These
         factors include but are not limited to:

            o    the size, timing and terms of specific orders by customers;

            o    the degree of market acceptance of new products and
                 technologies introduced by us and our competitors;

            o    the mix of products and services sold by us;


                               Page 16 of 25

<Page>

            o    the capital spending patterns of our customers;

            o    the relative percentages of products sold through our direct
                 and indirect sales channels;

            o    customer order deferrals in anticipation of enhancements or new
                 products;

            o    the timing of and level of our investments in research and
                 development activities;

            o    changes in, and our ability to implement, our strategy; and

            o    other risks described below.

         Furthermore, a significant portion of our operating expenses, including
         rent and salaries, is largely fixed in nature. Accordingly, if revenues
         are below expectations, our financial results are likely to be
         adversely and disproportionately affected because these operating
         expenses are not variable in the short term, and cannot be quickly
         reduced to respond to unanticipated decreases in revenues.

         A significant portion of our revenues is derived from a small number of
         transactions. Any delay in the implementation of one or more large
         transactions could materially harm our financial results in a
         particular quarter.

         Our financial results also are likely to fluctuate due to factors that
         impact our current and prospective customers. Expenditures by customers
         tend to vary in cycles that reflect overall economic conditions and
         individual budgeting and buying patterns and, in some cases, the
         ability of some of our customers to obtain the financing they require
         to make capital expenditures. Our business has been adversely affected
         by a softening economy, and we would be further harmed by a continued
         decline in the economic prospects of our customers or the economy in
         general. These adverse economic conditions are expected to alter
         current or prospective customers' capital spending priorities or budget
         cycles, or extend our sales cycle with respect to some of our
         customers. Our business also could be harmed by changes in customer
         spending patterns reflecting industry trends. In addition, our
         financial results historically have been influenced by seasonal
         fluctuations, with revenues tending to be strongest in the fourth
         quarter of each year and revenues in our first quarter tending to be
         consistent with, or decreasing from, the level achieved in the
         preceding quarter. We believe that this seasonality has been due to the
         capital appropriation practices of many of our customers; however, it
         is unclear how these historical trends will be affected by the slowdown
         in the telecommunications industry.

         As a result of all of the foregoing, we cannot assure you that our
         revenues will grow in future periods or that we will be profitable. In
         addition, in some future quarters our financial results again may be
         below the expectations of public market analysts. In such event, the
         market price of our common stock likely would fall.

         CONSOLIDATIONS IN THE TELECOMMUNICATIONS INDUSTRY OR A FURTHER SLOWDOWN
         IN TELECOMMUNICATIONS SPENDING COULD HARM OUR BUSINESS, FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.

         We have derived substantially all of our revenues from sales of
         products and related services to the telecommunications industry. Since
         early 2001, we and a number of other companies have experienced reduced
         spending by telecommunications carriers and equipment manufacturers.
         Our business, financial condition and results of operations could be
         materially harmed in the event of a further significant slowdown in
         this industry or in the event there are consolidations of our current
         or prospective customers. Slowdowns in spending often cause delays in
         sales and installations and could cause cancellations, any of which
         would harm our financial results in a particular period.

         CHANGES OR DELAYS IN THE IMPLEMENTATION OF OUR PRODUCTS COULD HARM OUR
         FINANCIAL RESULTS.

         Revenues for our network intelligence and business intelligence
         solutions are typically recognized upon the completion of installation,
         unless we have significant additional obligations. Customer- or Inet-


                               Page 17 of 25

<Page>

         caused delays in the commencement or completion of scheduled product
         installations, which from time to time result from site-readiness
         delays, lack of resources or other issues and lengthening of
         implementation schedules due to the introduction of new features or
         applications, could materially harm our financial results. With
         respect to contracts providing for a significant payment or
         performance milestone tied to customer acceptance or allowing
         customer return, termination or similar rights prior to acceptance,
         revenue will generally not be recognized until acceptance. For new
         products, we typically recognize revenue upon acceptance until a
         track record of installation is achieved, after which revenue
         recognition generally is tied to completion of installation. In cases
         where the recognition of revenue is tied to customer acceptance, the
         failure or delay in receiving such acceptance could harm our expected
         financial results for a particular period.

         ANY REVERSAL OR SLOWDOWN IN DEREGULATION OF TELECOMMUNICATIONS MARKETS
         COULD MATERIALLY HARM THE MARKET FOR OUR PRODUCTS.

         Future growth in the markets for our products will depend in part on
         continued privatization, deregulation and the restructuring of
         telecommunications markets worldwide. Any reversal or slowdown in the
         pace of this privatization, deregulation or restructuring could
         materially harm the markets for our products. Moreover, the
         consequences of deregulation are subject to many uncertainties,
         including judicial and administrative proceedings that affect the pace
         at which the changes contemplated by deregulation occur, and other
         regulatory, economic and political factors. Any invalidation, repeal or
         modification of the requirements imposed by the Telecommunications Act
         of 1996, the local telephone competition rules adopted by the U.S.
         Federal Communications Commission to implement that Act or similar
         international regulation could materially harm our business, financial
         condition and results of operations. Furthermore, the uncertainties
         associated with deregulation have in the past, and could in the future,
         cause our customers to delay purchasing decisions pending the
         resolution of these uncertainties.

         THE SALES CYCLE FOR OUR PRODUCTS IS LONG, WHICH COULD HARM OUR
         QUARTERLY FINANCIAL RESULTS.

         Sales of our network intelligence and business intelligence products
         and solutions are made predominately to large communications service
         providers and involve significant capital expenditures and lengthy
         implementation processes. Sales to this type of customer generally
         require an extensive sales effort throughout the customer's
         organization and final approval by an executive officer or other senior
         level employee. We expend substantial funds and management effort
         pursuing these sales. Additionally, potential customers' internal
         approval and contracting procedures, procurement practices, testing and
         acceptance processes are common and may cause potential sales to be
         delayed or foregone. As a result of these or other factors, the sales
         cycle for our solutions is long, historically ranging from six to 12
         months for our network intelligence and business intelligence solutions
         (excluding the cycle for subsequent applications and enhancements,
         which varies widely) and up to three months for occasional, large sales
         of our diagnostics solutions, and we have experienced lengthening sales
         cycles during the current soft economy. Accordingly, our ability to
         forecast the timing and amount of specific sales is limited, and the
         deferral or loss of one or more significant sales could materially harm
         anticipated financial results in a particular quarter, particularly if
         there are significant sales and marketing expenses associated with any
         deferred or lost sales.

         ANY DECREASE IN DEMAND FOR OUR PRODUCTS COULD SIGNIFICANTLY DECREASE
         OUR SALES.

         Our principal products, the GeoProbe, IT:seven and Spectra, generate
         substantially all of our revenues today and are expected to continue to
         account for substantially all of our revenues for the foreseeable
         future. Our business has been adversely affected by a softening
         economy, and we would be further harmed by a continued decline in the
         economic prospects of our customers or the economy in general. Any
         further downturn in the demand for our products would materially harm
         our business, financial condition and results of operations. We cannot
         assure you that we will be successful in developing any other products
         or taking any other steps to reduce the risk associated with any
         slowdown in demand for the GeoProbe, IT:seven and/or Spectra.


                               Page 18 of 25

<Page>

         IF THE MARKET FOR CONVERGING AND NEXT-GENERATION NETWORK SOLUTIONS
         FAILS TO DEVELOP OR GROWS MORE SLOWLY THAN WE ANTICIPATE, OUR FINANCIAL
         RESULTS COULD BE HARMED.

         Our future financial results are dependent in significant part on the
         continued viability and expansion of SS7 signaling networks, the
         convergence of the public switched telephone network, or PSTN, with new
         packet-based networks (for example, Internet protocol, or IP, and
         asynchronous transfer mode, or ATM) and the build out of
         next-generation networks. Our business, financial condition and results
         of operations could be materially harmed if the market for converging
         and next-generation network solutions fails to develop or grows more
         slowly than we currently anticipate.

         COMPETITION COULD RESULT IN PRICE REDUCTIONS, REDUCED MARGINS AND
         LOSS OF MARKET SHARE.

         Competition for all of our solutions is intense and is expected to
         continue and in some cases intensify in the future. We compete with a
         number of U.S. and international suppliers that vary in size, and in
         the scope and breadth of the products and services offered. Certain of
         our competitors have, in relation to us, longer operating histories,
         larger installed customer bases, longer-standing relationships with
         customers, greater name recognition and significantly greater
         financial, technical, marketing, customer service, public relations,
         distribution and other resources. Additionally, it is possible that new
         competitors or alliances among competitors could emerge and rapidly
         acquire significant market share. As a result, these competitors may be
         able to more quickly develop or adapt to new or emerging technologies
         and changes in customer requirements, or devote greater resources to
         the development, promotion and sale of their products. Increased
         competition is likely to result in price reductions, reduced margins
         and loss of market share.

         RAPID GROWTH AND EXPANSION OF OUR BUSINESS MAY STRAIN OUR RESOURCES AND
         HINDER OUR ABILITY TO IMPLEMENT OUR BUSINESS STRATEGY.

         We have historically experienced rapid and significant growth that has
         placed, and may in the future place, a significant strain on our
         management, information systems and operations. Any significant
         additional growth will require us to improve our financial, operational
         and management information and control systems and procedures.

         We anticipate that growth, if any, could require us to recruit and hire
         a substantial number of new employees, particularly sales and marketing
         personnel and technical personnel with signaling and IP knowledge and
         experience, both in the U.S. and internationally. Competition for
         personnel is intense, and we have at times experienced difficulty in
         recruiting qualified personnel. We historically have filled a portion
         of our new personnel needs with non-U.S. citizens holding temporary
         work visas that allow these individuals to work in the U.S. for only a
         limited period of time. Accordingly, any change in U.S. immigration
         policy further limiting the issuance of temporary work visas could
         adversely affect our ability to recruit new personnel. Furthermore, the
         addition of significant numbers of new personnel requires us to incur
         significant start-up expenses, including recruiting fees, procurement
         of office space and equipment, and initial training costs; and, we
         often experience low utilization rates with new personnel. We may be
         unable to successfully recruit or retain additional personnel as
         needed. In addition, the start-up expenses incurred in connection with
         the hiring of additional personnel could harm our future financial
         results.

         OUR BUSINESS DEPENDS ON RETAINING OUR EXISTING KEY PERSONNEL.

         Our business depends to a significant extent upon the continued service
         and performance of a relatively small number of key senior managers,
         technical personnel and sales and marketing personnel, few of whom are
         bound by an employment agreement. The loss of any existing key
         personnel, or the inability to attract, motivate and retain additional
         key personnel, could harm our business, financial condition and results
         of operations.


                               Page 19 of 25

<Page>

         WE MAY BE UNABLE TO ADAPT TO RAPID TECHNOLOGICAL CHANGE AND EVOLVING
         CUSTOMER REQUIREMENTS.

         The introduction of communications network management products
         involving superior technologies or the evolution of alternative
         technologies or new industry protocol standards could render our
         existing products, as well as products currently under development,
         obsolete and unmarketable. We believe that our future success will
         depend in part upon our ability, on a timely and cost-effective basis,
         to continue to:

            o    enhance our network intelligence, business intelligence and
                 diagnostics solutions;

            o    develop and introduce new products for the communications
                 network management market and other markets;

            o    keep pace with evolving industry protocol standards and
                 changing customer needs; and

            o    achieve broad market acceptance for our products.

         We cannot assure you that we will achieve these objectives.

         OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO DEVELOP NEW PRODUCTS
         BASED ON EMERGING TECHNOLOGIES.

         We expect carrier spending for legacy networks to decrease over time,
         which requires that we develop solutions for networks based on emerging
         packet technologies and standards, such as IP and ATM. We may not
         successfully develop competitive products for these emerging
         technologies and standards, which could harm our business, financial
         condition and results of operations.

         Products as complex as those currently under development by us
         frequently are subject to delays, and we cannot assure you that we will
         not encounter difficulties that could delay or prevent the successful
         and timely development, introduction and marketing of these potential
         new products. Even if such potential new products are developed and
         introduced, we cannot assure you that they will achieve any significant
         degree of market acceptance.

         WE HAVE INTERNATIONAL CUSTOMERS, AND, AS A RESULT, OUR BUSINESS MAY BE
         HARMED BY POLITICAL AND ECONOMIC CONDITIONS IN FOREIGN MARKETS AND THE
         CHALLENGES ASSOCIATED WITH OPERATING INTERNATIONALLY.

         Our international operations are subject to the risks inherent in
         international business activities. We believe that continued growth, if
         any, could require expansion of our efforts in international markets.
         This expansion may be costly and time-consuming and may not generate
         returns for a significant period of time, if at all. The risks inherent
         in international operations include:

            o    management of geographically dispersed operations;

            o    a longer sales cycle, especially in areas of recent expansion;

            o    longer accounts receivable payment cycles, and greater
                 difficulty in the collection of past due accounts;

            o    difficulty in establishing relationships with government-owned
                 or subsidized communications providers;

            o    general economic conditions in each country;

            o    currency controls and exchange rate fluctuations;

            o    seasonal reductions in business activity specific to certain
                 markets;


                               Page 20 of 25

<Page>

            o    loss of revenues, property and equipment from expropriation,
                 nationalization, war, insurrection, terrorism and other
                 political risks;

            o    foreign taxes and the overlap of different tax structures,
                 including modifications to the U.S. tax code as a result of
                 international trade regulations;

            o    greater difficulty in safeguarding intellectual property;

            o    import and export licensing requirements and other trade
                 restrictions;

            o    involuntary renegotiation of contracts with foreign
                 governments and communications carriers; and

            o    existence or adoption of laws and regulations affecting the
                 pace of deregulation, taxation of our business and the general
                 business climate for foreign companies.

         Continued international expansion of our business will require further
         significant management attention and financial resources. In order to
         further expand internationally, we may be required to establish
         relationships with additional distributors and third-party integrators.
         We cannot assure you that we will effectively establish such
         relationships. If international revenues are not adequate to offset the
         additional expenses of expanding international operations, it could
         harm our business, financial condition and results of operations.

         To date, a very high percentage of international sales have been
         denominated in U.S. dollars, and accordingly we have not been
         significantly exposed to fluctuations in non-U.S. currency exchange
         rates. As a result, our revenues in international markets may be harmed
         by a strengthening U.S. dollar. However, we expect that in future
         periods a greater portion of international sales may be denominated in
         currencies other than U.S. dollars, thereby exposing us to exchange
         rate gains and losses on non-U.S. currency transactions. We may choose
         to limit such exposure by entering into various hedging arrangements.
         We cannot be certain that any hedging strategies that we undertake
         would be successful in avoiding exchange-related losses.

         WE MAY BE UNABLE TO PRODUCE SUFFICIENT QUANTITIES OF OUR PRODUCTS
         BECAUSE WE OBTAIN KEY COMPONENTS FROM SOLE AND LIMITED SOURCE
         SUPPLIERS. IF WE ARE UNABLE TO OBTAIN THESE COMPONENTS, WE COULD BE
         UNABLE TO SHIP OUR PRODUCTS IN A TIMELY MANNER.

         We could experience delays or reductions in product shipments or
         increases in product costs if we are unable to obtain sufficient key
         components as required or to develop alternative sources if and as
         required in the future. Currently, our products utilize certain
         semiconductors that are available from only one manufacturer and other
         components that are available from only one or a limited number of
         suppliers. While alternative suppliers have been identified for a
         variety of key components, those alternative sources have not been
         qualified by us. Our qualification process could be lengthy, and we
         cannot assure you that additional sources would become available to us
         on a timely basis, or if such sources were to become available, that
         the components would be comparable in price and quality to our current
         components. We have no long-term agreements with our suppliers and, in
         the case of many components, make our purchases with purchase orders on
         an "as-needed basis." Certain components require an order lead-time of
         approximately nine months. Other components that currently are readily
         available may become difficult to obtain in the future. Our failure to
         order sufficient quantities of these components in advance of product
         delivery deadlines could prevent us from adequately responding to
         unanticipated increases in customer orders. In the past, we have
         experienced delays in the receipt of a variety of our key components,
         which have resulted in delays in product deliveries.


                               Page 21 of 25

<Page>

         OUR INVENTORY MAY BECOME OBSOLETE OR UNUSABLE.

         We make advance purchases of various component parts in relatively
         large quantities to ensure that we have an adequate and readily
         available supply. Our failure to accurately project our needs for these
         components and the demand for our products that incorporate them, or
         changes in our business strategy that reduce our need for these
         components could result in these components becoming obsolete prior to
         their intended use or otherwise unusable in our business.

         WE RELY ON THIRD-PARTY SUBCONTRACTORS TO MANUFACTURE AND DEVELOP OUR
         PRODUCTS. OUR ABILITY TO SELL PRODUCTS TO OUR CUSTOMERS COULD BE
         IMPAIRED IF THESE SUBCONTRACTORS DO NOT MEET THEIR COMMITMENTS TO US.

         Any disruption in our relationships with third-party subcontractors and
         our inability to develop alternative sources if and as required in the
         future could result in delays or reductions in product shipments or
         increases in product costs. We rely exclusively upon third-party
         subcontractors to manufacture our subassemblies, and we have retained,
         from time to time, third-party design services in the development of
         application-specific integrated circuits or the layout of circuit
         boards. We also frequently subcontract the development of specific
         features and enhancements of our products. Our reliance on third-party
         subcontractors involves a number of risks, including the potential
         absence of adequate capacity, the unavailability of or interruption in
         access to certain process technologies, and reduced control over
         product quality, delivery schedules, manufacturing yields and costs.

         WE RELY UPON SOFTWARE LICENSED FROM THIRD PARTIES. IF WE ARE UNABLE TO
         MAINTAIN THESE SOFTWARE LICENSES ON COMMERCIALLY REASONABLE TERMS, OUR
         BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE
         HARMED.

         We rely upon software that we license from third parties, including
         software that is integrated with our internally developed software and
         used in our products to perform key functions. The inability to
         maintain any software licenses on commercially reasonable terms could
         result in shipment delays or reductions until equivalent software could
         be developed or licensed and integrated into our products, which could
         harm our business, financial condition and results of operations.

         WE MAY NOT RECEIVE THE INTENDED BENEFITS OF FUTURE ACQUISITIONS, JOINT
         VENTURES OR OTHER BUSINESS RELATIONSHIPS.

         We may in the future pursue acquisitions of businesses, products and
         technologies, or the establishment of joint venture, strategic
         partnership or other arrangements that could expand our business. The
         negotiation of potential acquisitions or strategic relationships, as
         well as the integration of an acquired or jointly developed business,
         technology or product, could cause diversion of management's time and
         resources. Future acquisitions and strategic relationships by us could
         result in potentially dilutive issuances of equity securities, the
         incurrence of debt and contingent liabilities, amortization of
         intangibles, research and development write-offs and other
         acquisition-related expenses. We cannot assure you that any acquisition
         or joint venture will be successfully integrated with our operations.
         If we were to pursue any such acquisition or strategic relationship, we
         may not receive the intended benefits of the acquisition or strategic
         relationship. Also, we may pursue arrangements with third parties to
         perform specified activities for us such as the development of products
         or product features. We cannot assure you that these arrangements will
         produce to the level of quality or in the time frame expected, which
         could materially harm our business.

         WE MAY BE ACCUSED OF INFRINGING THE PROPRIETARY RIGHTS OF OTHERS, WHICH
         COULD SUBJECT US TO COSTLY AND TIME-CONSUMING LITIGATION.

         The communications industry is characterized by the existence of a
         large number of patents and frequent allegations of patent
         infringement. We have received, and may receive in the future, notices
         from holders of patents that raise issues as to possible infringement
         by our products. As the number of competitive


                               Page 22 of 25

<Page>

         products increases and the functionality of these products further
         overlaps, we believe that we may become increasingly subject to
         allegations of infringement. To date, we have engaged in
         correspondence with two third-party holders of patents as a result of
         such notices. While we believe that our products do not infringe on
         any valid patents cited in the notices, questions of infringement and
         the validity of patents in the field of communications signaling
         technologies involve highly technical and subjective analyses. We
         cannot assure you that any of these patent holders, or others, will
         not initiate legal proceedings in the future against us, or that if
         any proceedings were initiated, we would be successful in defending
         ourselves. Any proceeding could be time consuming and expensive to
         defend or resolve, result in substantial diversion of management
         resources, cause product shipment delays, or force us to enter into
         royalty or license agreements rather than dispute the merits of any
         such proceeding initiated against us. We cannot assure you that any
         such royalty or license agreements would be available on terms
         acceptable to us, if at all.

         OUR LIMITED ABILITY OR FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY MAY
         MATERIALLY HARM OUR ABILITY TO COMPETE.

         Our continued success is dependent in part upon our proprietary
         technology. To protect our proprietary technology, we rely on a
         combination of technical innovation, trade secret, copyright and
         trademark laws, non-disclosure agreements and, to a lesser extent,
         patents, each of which affords only limited protection. In addition,
         the laws of some foreign countries do not protect our proprietary
         rights in the products to the same extent as do the laws of the U.S.
         Despite the measures taken by us, it may be possible for a third party
         to copy or otherwise obtain and use our proprietary technology and
         information without authorization. Policing unauthorized use of our
         products is difficult, and litigation may be necessary in the future to
         enforce our intellectual property rights. Any litigation could be time
         consuming and expensive to prosecute or resolve, result in substantial
         diversion of management resources, and materially harm our business,
         financial condition and results of operations. We cannot assure you
         that we will be successful in protecting our proprietary technology or
         that our proprietary rights will provide us a meaningful competitive
         advantage.

         WE MAY FACE POTENTIAL LIABILITY FOR PRODUCT DEFECTS.

         Products as complex as ours may contain undetected defects or errors
         when first introduced or as enhancements are released that, despite our
         testing, are not discovered until after a product has been installed
         and used by customers, which could result in delayed market acceptance
         of the product or damage to our reputation and business. To date, we
         have not been materially harmed by products containing defects or
         errors. We attempt to include provisions in our agreements with
         customers that are intended to limit our exposure to potential
         liability for damages arising out of defects or errors in our products.
         However, the nature and extent of these limitations vary from customer
         to customer and it is possible that these limitations may not be
         effective as a result of unfavorable judicial decisions or laws enacted
         in the future. Although we have not experienced any product liability
         suits to date, the sale and support of our products entail the risk of
         these claims. Any product liability claim brought against us,
         regardless of its merit, could result in material expense to us,
         diversion of management time and attention, and damage to our business
         reputation and our ability to retain existing customers or attract new
         customers.

         OUR THREE FOUNDERS OWN APPROXIMATELY 78% OF OUR COMMON STOCK, WHICH
         ALLOWS THEM TO CONTROL THE MANAGEMENT AND AFFAIRS OF OUR COMPANY OR
         PREVENT A CHANGE OF CONTROL.

         As of September 30, 2001, our three founders, Samuel S. Simonian, Elie
         S. Akilian and Mark A. Weinzierl, beneficially owned approximately 78%
         of the outstanding shares of our common stock. Consequently, two or
         more of these individuals, acting together, could control the outcome
         of all matters submitted for stockholder action, including the election
         of our board of directors and the approval of significant corporate
         transactions. They effectively control the management and affairs of
         our company, which could have the effect of delaying or preventing a
         change in control of our company. In addition, Messrs. Simonian,
         Akilian and Weinzierl are members of our board of directors and have
         significant influence in directing the actions taken by our board.


                               Page 23 of 25

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         OUR BUSINESS AND REPUTATION COULD SUFFER IF WE DO NOT PREVENT SECURITY
         BREACHES.

         We have included security features in some of our products that are
         intended to protect the privacy and integrity of customer data. Despite
         the existence of these security features, our products may be
         vulnerable to breaches in security due to unknown defects in the
         security mechanisms, as well as vulnerabilities inherent in the
         operating system or hardware platform on which the product runs and/or
         the networks linked to that platform. Security vulnerabilities,
         regardless of origin, could jeopardize the security of information
         stored in and transmitted through the computer systems of our
         customers. Any security problem may require significant capital
         expenditures to solve and could materially harm our reputation and
         product acceptance.

         WE HAVE ADOPTED ANTI-TAKEOVER DEFENSES THAT COULD DELAY OR PREVENT AN
         ACQUISITION OF OUR COMPANY.

         Our certificate of incorporation and bylaws and Delaware law contain
         provisions that may have the effect of discouraging, delaying or
         preventing a change in control of our company or unsolicited
         acquisition proposals that a stockholder may consider favorable. For
         example, we have a classified board of directors with three-year terms,
         our stockholders are unable to take action by written consent and our
         stockholders are limited in their ability to make proposals at
         stockholder meetings.

         VOLATILITY IN OUR STOCK PRICE COULD RESULT IN CLAIMS AGAINST US.

         The market price of our common stock has been, and is likely to
         continue to be, highly volatile and may be significantly affected by
         factors such as:

            o    variations in our results of operations;

            o    changes in our business strategy;

            o    future sales of common stock;

            o    the announcement of technological innovations or new products
                 by us, our competitors and others;

            o    market analysts' estimates of our performance;

            o    general market and economic conditions; and

            o    equity market conditions and industry-specific equity market
                 trends.

         The public markets have experienced significant volatility that has
         particularly affected the market prices of securities of many
         technology and telecommunications companies for reasons that have often
         been unrelated to financial results. This volatility has and may
         continue to materially harm the market price of our common stock as
         well as our visibility and credibility in our markets.

         Additionally, in the past, securities class action litigation often has
         been brought against a company following periods of volatility in the
         market price of its common stock. We may be the target of similar
         litigation in the future. Securities litigation could result in
         substantial costs and divert our management's attention and resources.


                               Page 24 of 25

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We are exposed to immaterial levels of market risk. Revenues from
         customers located outside of the U.S. represented 58.4% of total
         revenues for the nine months ended September 30, 2001, 55.8% of total
         revenues in 2000, 51.7% of total revenues in 1999 and 52.2% of total
         revenues in 1998. To date, a very high percentage of international
         revenues have been denominated in U.S. dollars, and accordingly, we
         have not been significantly exposed to fluctuations in currency
         exchange rates.

         Our international business is subject to the typical risks of any
         international business, including, but not limited to, the risks
         described in Item 2 -- "Management's Discussion and Analysis of
         Financial Condition and Results of Operations -- Risk Factors."
         Accordingly, our future results could be materially harmed by these or
         other factors.

         Currently, our cash is solely invested in money market funds
         denominated in U.S. dollars. We account for these investments in
         accordance with SFAS No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN
         DEBT AND EQUITY SECURITIES. These cash equivalents are treated as
         available-for-sale under SFAS No. 115. The carrying value of these cash
         equivalents approximates fair market value.

PART II.    OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         The Securities and Exchange Commission on May 26, 1999 declared
         effective our registration statement on Form S-1 (File No. 333-59753)
         relating to the initial public offering of our common stock. As of
         September 30, 2001, we have used all of the net offering proceeds for
         the purchase of temporary investments, consisting of cash, cash
         equivalents, and short-term investments. We currently intend to use the
         net proceeds of the offering for working capital and general corporate
         purposes, including financing accounts receivable and capital
         expenditures made in the ordinary course of business. We also may apply
         a portion of the proceeds of the offering to acquire businesses,
         products and technologies, or enter into joint venture arrangements,
         that are complementary to our business and product offerings; however,
         at this time we have not identified a specific acquisition or joint
         venture or allocated a specific amount for this purpose.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibits - None

         (b)   We did not file any Current Reports on Form 8-K during the
               quarter ended September 30, 2001.

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                               INET TECHNOLOGIES, INC.


                               By:  /s/ JEFFREY A. KUPP
                                    -----------------------------------------
                                    Jeffrey A. Kupp
                                    Vice President and Chief Financial Officer
                                    (Principal accounting and financial officer)


Date:  November 2, 2001


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